CBOT corn outlook: Down slightly, awaiting direction on weather

U.S. corn futures are poised to open slightly lower Friday as the market struggles for direction amid uncertainty about weather in the Midwest.

Traders expect Chicago Board of Trade futures to open 2 to 4 cents lower. In overnight trade, corn for September delivery was down 3 1/4 cents to $6.76 per bushel, while December corn was down 2 1/2 cents to $6.70 1/2.

The market is in the midst of a retreat that started Wednesday, after prices had reached five-week highs on crop concerns. While the Midwest baked for much of this week in hot, dry temperatures that are unfavorable for the crop, potential damage has already been factored in at this point, analysts said.

Traders are gauging weather forecasts to see if the stress on the crop will continue. With the weekend approaching and the potential for the forecast to change between now and Sunday evening when trade resumes, the market could see choppy trade Friday, analysts said.

Pushing the market above $7 a bushel will likely require a major drought in the corn belt, said Chad Henderson, analyst with Prime-Ag Consultants in Wisconsin. But prices are unlikely to break below $6.50 until it's clear the crop has successfully weathered the recent heat wave, he said.

"As long as this heat doesn't stick around for three weeks, I think all-in-all the crop is going to get through it in pretty good shape," Henderson said. "But I don't think people will want to stick their neck out too far on yield until we get to pollination."

Traders are paying close attention to weather because farmers need favorable conditions to grow a large crop to replenish low corn inventories. Corn prices have pulled back 15% since reaching an all-time high in early June on supply concerns.

Parts of the corn belt are receiving some much-needed rain. Areas of Nebraska, Iowa and Minnesota saw rains on Thursday, and northern Illinois and Wisconsin are getting rains Friday.

While hot temperatures are easing somewhat, forecasters say the weather is expected to heat up again later next week. The extent of that heat wave will likely be a focus for traders on Monday, analysts said.